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Chinese officials support Saab deal 'in principle'

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Chinese officials support Saab deal 'in principle'
Pang Da CEO Pang Qinghua outside the Vänersborg District Court on Friday
08:17 CET+01:00
China's Minister of Industry and Information Technology said Tuesday his government supported “in principle” plans by Chinese automakers Pang Da and Youngman to purchase Saab Automobile.

On the margins of an industrial fair taking place in Shanghai, minister Miao Wei gave the first public signals of how the Chinese government viewed the deal.

“We support it in principle,” Wei told the Reuters news agency.

Last week, both Pang Da and Youngman signed a memorandum of understanding to purchase Saab from its parent company, Swedish Automobile.

According to the preliminary business restructuring plan submitted by court appointed administrator Guy Lofalk, the Chinese firms intend to supply to €610 million ($855 million) in long-term funding for Saab.

Saab would also receive €50 million in bridge financing from Pang Da and Youngman, as well as tap a €63 million credit line with the European Investment Bank (EIB).

The Chinese companies have said they prepared to invest more than €2 billion up until 2017 in an effort to return Saab to profitability.

Much of the spending would be devoted to developing new car models as well as launching Saab production facilities in China.

The blessing of the Chinese government is critical for the planned deal, although it is among one of many parties who must also approve the deal before it is finalized.

The Youngman-Pang Da buy-out also requires approval the EIB, the Swedish National Debt Office (Riksgälden) and Saab's former owner General Motors (GM).

The latter is expected to be among the most difficult to get on board, due to among other things, concerns over its technology going to China.

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